When Must I Sub-Contract?

There seems to be a lot of confusion amongst entrepreneurs when it comes to tenders and sub-contracting. The Draft Preferential Procurement Regulations, have been gazetted and are currently up for review. However, these Regulations are the major cause for the confusion. Many entrepreneurs ask whether they should sub-contract or not whilst responding to a tender.

The Draft Preferential Procurement Regulations stipulates the following: 

Finding Sub-contractors

According to the Draft Preferential Procurement Regulations, 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME’s. These categories are:

  • Black female owned EME’s or QSE’s;
  • Black youth owned EME’s or QSE’s;
  • Black owned EME’s or QSE’s.

Once the new Regulations are gazetted there businesses will need to find sub-contractors to fill this requirement.

Sub-contractors versus Consortiums and Joint Ventures

Tenders and subcontracting

Did you know tenders and subcontracting go hand in hand. In fact, subcontracting part of a tender is so common in South Africa that there are specific rules regulating subcontracting in executing tenders especially Government tenders.

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Title Closing Date Tender No.
Provision of Events Services: Municipal Year-End Function 2017-12-21 13:00 SCM/2018/177/CORP
Supply: Building material 2017-12-18 14:00 GE11800903
Supply: Extruder 2017-12-21 14:00 GE11800905
Supply and delivery of loud hailers to ZDM Vehicles 2017-12-19 12:00 ZDMQ 0403/12/2017
Supply and delivery of Stationery 2017-12-19 12:00 ZDMQ: 0404/12/2017
Training on Demonstrate Knowledge of Waste Water Pipe Unblocking and Maintenance 2018-01-11 12:00 ZDMQ0405/12/2017
Supply: Hardware items 2017-12-15 12:00 GG11800418
Training on Construct Water Reticulation Concrete Works 2018-01-11 12:00 ZDMQ0406/12/2017
Supply Hardware items 2018-01-15 12:00 GG11800417
Training on applying Health and Safety Practices in the water sector for process operations 2018-01-11 12:00 ZDMQ0407/12/2017
Supply Hardware items 2018-01-15 12:00 GG11800416
Supply strapping - material: grade 304 stainless steel 2018-01-15 12:00 GG11800419
Training on Conducting a workshop on Job Evaluation Systems, Job Descriptions Alignment with the Organogram and Change Management 2018-01-05 12:00 ZDMQ0408/12/2017
Supply: Water distribution material 2017-12-21 14:00 GE11800898
Electrification of 136 Households in Nuresh A and B Villages 2017-12-29 12:00 MATAT 2017/2018-28
Supply: Engineering materials 2017-12-18 14:00 GE11800901
Provision of Website Hosting, Development, Redesign and Maintenance Services 2018-01-09 12:00 MATAT 2017/2018-31
Provision of Training on Construction Roadworks (National Certificate NQF Level 2- Unit Standard 24133) for 10 municipal employees 2017-12-29 12:00 MATAT 2017/2018-32
Supply polymer grids, covers and frames 2017-12-21 14:00 GE11800902
Provision Electronic Document Management System 2017-12-29 12:00 MATAT 2017/2018-27

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Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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